Imagine that you are Joe Blow, Executive VP of Football Operations for the Denve

Question

Imagine that you are Joe Blow, Executive VP of Football Operations for the Denver Broncos, and you have a pressing decision to make.   You have the chance to land #18 - Peyton Manning - a sure Hall of Fame player who might take the Broncos to a higher level.   Or, you could talk Trent Dilfer out of retirement. Sure, Trent is 40 years old, but he was never that fast or mobile, he HAS won a Super Bowl and you could get him for a song -- his contract might be 1/10th the cost of Peyton’s and you could cover that cost in a heartbeat.   Is payback period the definitive tool to help you make your decision on which player (Peyton or Trent) to sign?

Question 3 options:

True

False

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True

False

Explanation / Answer

false

Payback period is not the definitive method because the cash flows beyond payback period are not considered, which can be huge for Peyton Manning

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